Police seized 19 tonnes of white powder, believed to be ketamine, from a house in Rawang

A 36-year-old Indian man was arrested in a drug bust in Malaysia's capital Kuala Lumpur, media reported on Friday.

Police seized 19 tonnes of white powder, believed to be ketamine, from a house in Rawang.

Assistant Commisioner R. Munusamy said the house was used as a storage facility for the substance, estimated to be worth at least 290 million Malaysian ringgits ($7.6 million).

"When we arrested the suspect (on Thursday), we found two packets, each containing five kg of white powder," The Star Online quoted Munusamy as saying.

The arrested Indian man was not identified.

"Following the arrest, the suspect led us to a house along Jalan Aman Sierra, Rawang," he said, adding that when they searched the house they found 762 gunny sacks, each containing 25 kg of the same white powder that they found at the time of arrest.

He said police also arrested a 42-year-old businessman at the house.

"We have sent the substance for analysis to verify that it is ketamine. Both men were remanded to help with investigation," he said, adding that the drugs were believed to have been brought in from India.

Munusamy said they were investigating how the syndicate smuggled the drugs to the country.

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Amendment to Section 45 of Insurance Act means that all claims will have to be paid after three years. This will help genuine policyholders but will it give a fillip to fraudsters? What can be the impact on you?

Life insurance companies find themselves in a tough situation with the Amendment to Section 45 of the Insurance Act. It can be difficult time ahead for insurers and easier time for genuine policyholders. According to Section 45 of the Insurance Act, 1938, “No life insurance policy can be called into question on grounds of mis-statement or wrong disclosure after two years of the policy coming into force. However, if the insurer is able to prove that the claim was fraudulent, it need not be passed.” This used to give insurers a leeway for making investigation after the death claim was received. The investigation was usually done for early claims within two or three years of the policy purchase. If there was misrepresentation, mis-statement or non-disclosure while buying the policy, then the claim was rejected. Needless to say, if there was fraud detected by the insurer then the claim was rejected too.

Section 45 of the new insurance Bill, states a policy cannot be called in question after three years of it being issued. Insurers will find it almost impossible to repudiate claims after three policy years due to the amendment. It puts the onus on the insurer to do proper checks at the time of underwriting. There will be need for robust underwriting process so that all issues are flagged before the policy inception. The insurer will have three years to raise any objections regarding the insured declarations. The amendment should be a welcome change for the genuine policyholders. It will not allow insurers to reject claim after three years under the garb of any misrepresentation, mis-statement or non-disclosure while buying the policy.

However, what about fraudsters who are out there to defraud life insurers? According to a senior insurance official, there are specific locations in India where insurance fraud is prevalent. “We are wary about underwriting policies from these locations. They work in an organised way with full set of forged documents to cover up the fraud. There can be cases of insurance taken in name of dead person with death certificate forged to put a future date after fraudulently buying the policy,” he said.

A retired senior insurance official, says, “Insurance companies will bleed if they are forced to pay all claims after three years of buying. The amendment should have considered disallowing claims if there is a proven fraud.”

What may be expected in the near future?

Stringent verification process – Insurers will have a higher scrutiny of customers at the buying process. It should be a welcome step for genuine customers who should not be looking for speed in buying, but proper underwriting by insurers. Today, medical tests are not required for insurance up to specific amount and based on age. This can be changed to bring more buyers under the ambit and even for even lower sum assured. Medical tests should not be avoided by the customer.

Premium increase – If there are insurer losses and overall loss by the industry due to claim payment to fraud cases, then the overall premium can increase for all the customers. It means bad news for the customers, but it is the price to be paid for ensuring genuine claims is paid. The premium for life insurance is locked for the policy term and hence it makes sense to buy term plan today rather than waiting for tomorrow.

Claims settlement will improve – The amendment will put pressure on insurers to settle claims when the policy is over three years without doing investigation. It will mean lower death claim rejections. Life Insurance Corporation of India (LIC) has lowest rejection ratio (1.10%) in 2013-14 followed by private insurers like HDFC Life (4.70% rejection ratio) and ICICI Pru (4.98%). But, even 1.10% rejection ratio of LIC equates to 8,387 claims rejected for amount of Rs181.30 crore. With amended section 45, fewer claims will be rejected and hence higher cost to the insurer.

The amendment forces the insurers to do the underwriting at the underwriting stage rather than at the death claim stage. The lax insurers have got a wake-up call. Genuine policyholders have less to worry as the family can be assured of claims payment especially if the death is after three years of policy purchase. Hopefully, the insurers are able to keep the fraudsters at bay with usage of technology and other fraud detection means. The amendment is a boost to make the insured trust the insurer and should help to increase life insurance penetration too. It can be a game changer for helping the underinsured Indians to buy life insurance with faith in claims process.

Will the life insurers and Life Insurance Council be able to reverse the impact of Sec 45 amendment in future is a million dollar question.

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COMMENTS

krishnan

1 year ago

This is downright silly .The govt is desperate to show they are doing something! instead of checking if genuine claims are getting rejected ,they are asking the insurers to pay all claims!

As one example of western fraud - it is a fact that migrants from poor countries attempt insurance fraud in Canada as a desperate measure to get hard cash compensation.

Jagdish Motwani

1 year ago

A very Good Move, but 2008 Bill's period of 5 Years instead of current 3 Years would have been better. Also was expecting similar provision for Health & Personal Accident Insurance Policies.
Jagdish Motwani

nginx

1 year ago

I believe this is how it works in the US too. Good to see that India has taken this important step in safeguarding the interest of the Insureds. No doubt this will encourage more people to take insurance.

India will never be free of frauds, that's for sure given the mentality of people in this country. Hence Insurers always needed to be on their toes anyway. This amendment changes nothing except that the Insurance Companies now must do the background verification of customer before actually issuing the policy instead of harassing the beneficiary after death of the insurer. This is how it should have been from the beginning.

As long as Insurers underwrite policies properly and effectively on health and financial grounds frauds can be reduced to a minimum. We can NEVER be a fraud free country

These are some of the key findings of a study conducted by Save the Children, a child-rights organisation working with socially-excluded children

A study by a rights group shows that 8,044 children (aged five to 17) are estimated to be working in the garment industry in eight wards of the National Capital Territory of Delhi.

Of these, 87 percent were working in household units and 13 percent at addas (small-scale commercial units).

Of them, 82 percent said that given an opportunity, they would not like to attend school.

These are some of the key findings of a study conducted by Save the Children, a child-rights organisation working with socially-excluded children.

As many as 92 percent of children working in household units were enrolled in schools, but 22 percent said they were not interested in education. In addas, children were either not enrolled or did not attend schools.

About 78 percent of children knew about their right to free and compulsory education, and they also knew that child labour is illegal. Yet, 92 percent said they were happy with their work. It is possible the children did not say what they really felt, as the study noted, or they knew little of a world they had never experienced or were happy to be earning at that age.

But, more than 40 percent of the respondents did not want to continue in the profession and said they would like to pursue medicine, engineering and law - if they ever got the chance.

More children work in India than anywhere else

With Kailash Satyarthi shareing the Nobel Peace Prize for his work against child labour, there has been renewed attention on the issue in India, which has 11.7 million child workers, according to Census 2011, the most of any country.

There are 168 million child labourers aged 5-17 years worldwide, which is 11 percent of the world’s child population, according to an International Labour Organization report.

India accounts for the largest number of child labourers worldwide with 11.7 million, according to the 2011 census.

The study found children working in three districts: East Delhi, South Delhi and South East Delhi. Children under the age of 14 cannot be employed under Indian law.

Most of the children who worked in garment units had migrated from Uttar Pradesh, Bihar, Jharkhand and West Bengal. Of the 170 children surveyed, 102 were girls. More than 60 percent worked because their families needed the money.

A childhood lost to skilled labour

Child labourers are exploited the most in addas. They work for 12-14 hours a day and mostly live at the work place. They visit their families once in six months or a year, depending upon the adda owners.

Children in household units enjoy a bit of liberty. They work for three to four hours a day, if enrolled in schools. If not enrolled, they work all day. The study found that 92 percent of children working in household units were enrolled in schools that they attended regularly.

Children in the garment industry worked at thread-cutting, stone-pasting, embellishment, embroidery, zari work, packaging and delivery. This includes skill, semi-skilled and unskilled work.

The majority of those in household units are paid less than Rs.500 ($8) per month. While their parents are paid, children sometimes are given money for their expenses. So, technically, children don’t get paid for the work they do.

In addas, 45 percent of children get between Rs 2,501-Rs.5,000 per month and 45 percent get more than Rs.5,000 per month. Most of them get paid on the basis of pieces they make or work on.

The risks and abuse that they do not discuss

After 35 to 40 years, the body begins to give up, adda owners told researchers, with eyes and hands not as sharp as they once were. Children complain of body ache, back pain and weak eye sight, and they are always at risk from the sharp tools, cutters, needles and machines that they work with.

There is no medical assistance at household units or addas.

The Save The Children study reported some instances of physical, verbal and sexual abuse ataddas. While 11 percent children reported abuse at home workplaces, only 6 percent at addas complained of abuse.

That does not mean abuse is low. It is likely that reporting of abuse is low, with children possibly reluctant to even admit it to the research team.